Australian regulator warns of crypto, AI on ‘regulatory perimeter’

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Australia’s top financial regulator, the Australian Securities and Investments Commission (ASIC), published a report on where risks are most likely to emerge in 2026, flagging regulatory gaps related to digital assets and artificial intelligence (AI) as key issues.

In the report, titled “Key issues outlook 2026,” ASIC grouped digital assets, AI-driven financial services, and payments as areas that currently stand on the “regulatory perimeter,” creating gaps that could lead to uncertainty, unlicensed activity, and misconduct.

AI was singled out as a particular risk, both in terms of regulatory uncertainty and cybercrime.

AI risk

According to ASIC, rapid advances in AI are transforming financial services and fueling a surge in AI‑powered cybercrime that is “testing the resilience of companies and undermining public trust in AI‑driven decisions.”

“We are increasingly seeing consumers face risks from automated decisions, AI-driven interactions, and scams amplified by technology,” said the regulator. “As ASIC has found in research, there is variable maturity in how businesses manage AI governance risks.”

Currently, there is no AI-specific regulation or legislation in Australia. In September 2024, the Australian Department of Industry, Science and Resources released a proposal paper on introducing mandatory guardrails for AI in high-risk settings; however, this has yet to be translated into new laws.

A similar lack of new regulation has also contributed to another of ASIC’s key issues for 2026, digital asset sector ambiguity.

Mind the digital asset gap

Another key concern for the Australian finance watchdog was the uncertainty around digital assets in the country, given the absence of specific regulation.

“ASIC is tracking major shifts across Australia’s financial system as pressures on consumers, markets and businesses intensify,” said the regulator. “Rapid innovation by or for people unfamiliar with financial services — particularly in digital assets and fintechs — continues to create risks, including with unlicensed advice, misleading conduct, and the exploitation of unclear regulatory boundaries.”

In addition, the finance watchdog warned that some entities will actively seek to remain outside regulation, further contributing to perceived regulatory uncertainty.

“As a result, ensuring clarity on licensing requirements and maintaining effective perimeter oversight will remain priorities for ASIC in 2026,” said the report.

In a gentle nudge to dallying lawmakers, the regulator emphasized that it is ultimately for the government to determine whether a new class of products or services should be brought within a licensing regime.

State of Australian crypto regulation

However, this is where the ambiguity enters, as—in the absence of new crypto-specific legislation—the legal status of digital assets is determined based on their structure and the associated rights, on a case-by-case basis.

Thus, depending on the circumstances, digital assets may constitute interests in managed investment schemes, securities, derivatives, or fall into a category of more generally defined financial products, all of which are subject to AFSL regulation. Equally, they may be deemed to be a product that falls outside of the regime.

This ad-hoc approach creates uncertainty and leaves gaps, particularly for digital asset exchanges, custody services, and platforms that hold client assets but don’t clearly fit existing categories.

In order to fix this, in November 2025, the Australian Parliament introduced he ‘Digital Assets Framework Bill 2025’, which intends to create crypto-specific regulatory categories, clearly bring key digital asset services within the licensing perimeter, standardize obligations, and provide greater legal certainty for businesses and users.

The bill proposes to introduce two new categories of financial products, ‘Digital Asset Platforms’ and ‘Tokenised Custody Platforms’; the former being facilities where an operator holds digital tokens (underlying assets), either for themselves or on behalf of someone else, while the latter are facilities where an operator identifies and holds assets other than money, issuing a single digital token for each asset, which grants the holder the right to redeem or direct the delivery of that asset.

Operators of these platforms would be required to hold an AFSL and comply with the general obligations that apply to all AFSL holders.

The bill has had its second reading in the House of Representatives but has yet to progress further. It remains unclear if and when this, or any other clarity-providing legislation, will be passed.

Until such time, digital assets and AI will likely remain on ASIC’s watch and warning list of key issues.

In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.

Watch: The quiet rise of blockchain in mainstream finance